DLH (DLHC) 10-Q11 May 172017 Q2 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Mar. 31, 2017	Apr. 30, 2017
Document and Entity Information
Entity Registrant Name	DLH Holdings Corp.
Entity Central Index Key	785,557
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		11,251,614

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Income Statement [Abstract]
Revenue	$ 29,905	$ 16,934	$ 56,016	$ 33,493
Direct expenses	23,504	13,710	43,804	27,352
Gross margin	6,401	3,224	12,212	6,141
General and administrative expenses	4,008	2,513	8,729	5,028
Depreciation and amortization	554	22	755	42
Income from operations	1,839	689	2,728	1,071
Other income (expense), net	(255)	(127)	(619)	(702)
Income before income taxes	1,584	562	2,109	369
Income tax expense (benefit), net	605	225	806	148
Net income	$ 979	$ 337	$ 1,303	$ 221
Net income per share, basic (in dollars per share)	$ 0.09	$ 0.04	$ 0.12	$ 0.02
Net income (loss) per share - diluted (in dollars per share)	$ 0.08	$ 0.03	$ 0.10	$ 0.02
Weighted average common shares outstanding
Basic (in shares)	11,249	9,717	11,225	9,642
Diluted (in shares)	12,745	10,666	12,713	10,540

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2017	Sep. 30, 2016	Jun. 30, 2016	Sep. 30, 2015
Current assets:
Cash and cash equivalents	$ 3,091	$ 3,427		$ 5,558
Accounts receivable, net	8,871	6,637
Other current assets	757	542
Total current assets	12,719	10,606
Equipment and improvements, net	1,120	644
Deferred taxes, net	10,773	11,415
Goodwill and other intangible assets, net	41,997	42,304
Other long-term assets	105	105
Total assets	66,714	65,074
CURRENT LIABILITIES
Loans Payable, Current	3,580	3,560
Derivative Liability, Current	256	204
Accrued payroll	3,428	3,616
Accounts payable, accrued expenses, and other current liabilities	8,711	7,136
Total current liabilities	15,975	14,516
LONG TERM LIABILITIES
Long-term Debt	17,096
Other long term liability		18,782
Total liabilities	33,071	33,298
Commitments and contingencies
SHAREHOLDERS’ EQUITY
Preferred stock, $.10 par value; authorized 5,000 shares, none issued and outstanding	0	0
Common stock, $.001 par value; authorized 40,000 shares; issued and outstanding 11,252 at March 31, 2017 and 11,148 at September 30, 2016	11	11
Additional paid-in capital	82,460	81,897
Accumulated deficit	(48,828)	(50,132)
Total shareholders’ equity	33,643	31,776
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 66,714	$ 65,074

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2017	Sep. 30, 2016
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.1	$ 0.1
Preferred stock, authorized shares	5,000	5,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized shares	40,000	40,000
Common stock, issued shares	11,242	11,148
Common stock, outstanding shares	11,242	11,148

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating activities
Net income (loss)	$ 1,303	$ 221
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization expense	755	42
Amortization of debt financing costs	127	0
Stock based compensation expense	549	342
Change in fair value of derivative financial instruments	(52)	0
Deferred taxes, net	642	39
Changes in operating assets and liabilities
Accounts receivable	(2,234)	(68)
Other current assets	(215)	(55)
Accounts payable, accrued payroll, accrued expenses and other current liabilities	1,386	784
Other long term assets/liabilities	124	153
Net cash provided by operating activities	2,489	1,458
Investing activities
Acquisition of Danya, net of cash acquired	(250)	0
Purchase of equipment and improvements	(674)	(35)
Net cash used in investing activities	(924)	(35)
Financing activities
Net repayments on senior debt	(1,875)	0
Repayments of capital lease obligations	(40)	(47)
Net proceeds from issuance of stock	14	0
Net cash used in financing activities	(1,901)	(47)
Net change in cash and cash equivalents	(336)	1,376
Cash and cash equivalents at beginning of period	3,427	5,558
Cash and cash equivalents at end of period	3,091	6,934
Supplemental disclosures of cash flow information
Cash paid during the period for interest	434	0
Cash paid during the period for income taxes	$ 300	$ 105

Basis of Presentation

Basis of Presentation	6 Months Ended
Basis of Presentation	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation The accompanying unaudited consolidated financial statements include the accounts of DLH and its subsidiaries, all of which are wholly owned. All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these statements do not include all of the information and footnotes required by generally accepted accounting principles ("GAAP") for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending September 30, 2017 . For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual report on Form 10-K for the year ended September 30, 2016 filed with the Securities and Exchange Commission on December 9, 2016 .

Business Overview

Business Overview	6 Months Ended
Business Overview	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business Overview	Business Overview DLH is a full-service provider of professional healthcare and social services to government agencies including the Department of Veteran Affairs ("VA"), Department of Health and Human Services ("HHS"), Department of Defense ("DoD"), and other government agencies. DLH Holdings Corp. (together with its subsidiaries, "DLH" or the "Company" and also referred to as "we," "us" and "our") manages its operations from its principal executive offices at 3565 Piedmont Road NE, Building 3 Suite 700, Atlanta Georgia 30305. We employ over 1,400 skilled employees working in more than 30 locations throughout the United States. On May 3, 2016, DLH acquired Danya International, LLC (“Danya”) which provides technology-enabled program management, consulting, and digital communications solutions to the federal government and other customers. We acquired Danya to expand our ability to provide complementary business services and offerings across government markets. This acquisition is in line with our strategic growth initiatives, and we intend to continue to review and position ourselves for other potential corporate transactions in the future. Presently, the Company derives 100% of its revenue from agencies of the federal government, primarily as a prime contractor but also as a subcontractor to other Federal prime contractors. A major customer is defined as a customer from whom the Company derives at least 10% of its revenues. Our largest customer continues to be the VA, which comprised approximately 58% and 95% of revenue for the six months ended March 31, 2017 and 2016 , respectively. Additionally, HHS represents a major customer, comprising 30% of revenue for the six months ended March 31, 2017 . In addition, substantially all accounts receivable, including unbilled accounts receivable, are from agencies of the U.S. Government as of March 31, 2017 and September 30, 2016. We believe that the credit risk associated with our receivables is limited due to the creditworthiness of these customers. See Note 4, Supporting Financial Information-Accounts Receivable. As of March 31, 2017 , awards from VA and HHS have anticipated periods of performance of up to three years. These agreements are subject to the Federal Acquisition Regulations. While there can be no assurance as to the actual amount of services that the Company will ultimately provide to VA and HHS under its current contracts, we believe that our strong working relationships and our effective service delivery support ongoing performance for the contract term. The Company's results of operations, cash flows and financial condition would be materially adversely affected in the event that we were unable to continue our relationship with VA or HHS.

New Accounting Pronouncements

New Accounting Pronouncements	6 Months Ended
New Accounting Pronouncements	Mar. 31, 2017
Accounting Changes and Error Corrections [Abstract]
New Accounting Pronouncements	New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued guidance outlining a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers that supersedes most current revenue recognition guidance. This guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, this guidance expands related disclosure requirements. The FASB has continued to issue periodic updates to this guidance, to further define the application of the changes. Public business entities should apply the guidance to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is evaluating the impact of this guidance. In June 2014, the FASB issued guidance related to accounting for share-based payments for certain performance stock awards. In March 2016, the FASB issued updated guidance intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. The amendments in this update affect all entities that issue share-based payment awards to their employees. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has adopted this guidance and concluded that it will not significantly affect the Company. In September 2015, the FASB issued guidance regarding business combinations for which the accounting is incomplete by the end of the reporting period in which the combination occurs, and during the measurement period have an adjustment to provisional amounts recognized. To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, the amendments in this update eliminate the requirement to retrospectively account for those adjustments. The amendments in this update are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this update, with earlier application permitted for financial statements that have not been issued. Refer to Note 4 for the impact of the adoption of this guidance. In February 2016, the FASB issued guidance intended to improve financial reporting for leasing transactions with a lease term of more than 12 months. The new guidance will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The recognition, measurement, and presentation of expenses and cash flow arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP - which requires only capital leases to be recognized on the balance sheet, the new guidance will require both types of leases to be recognized on the balance sheet. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. The Company is evaluating the impact of this guidance.

Supporting Financial Informatio

Supporting Financial Information	6 Months Ended
Supporting Financial Information	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Supporting Financial Information	Supporting Financial Information Accounts receivable (in thousands) March 31, September 30, Ref 2017 2016 Billed receivables $ 7,459 $ 5,265 Unbilled receivables 1,412 1,372 Total accounts receivable 8,871 6,637 Less: Allowance for doubtful accounts (a) — — Accounts receivable, net $ 8,871 $ 6,637 Ref (a): Accounts receivable are non-interest bearing, unsecured and carried at fair value, which is net of an allowance for doubtful accounts. We evaluate our receivables on a quarterly basis and determine whether an allowance is appropriate based on specific collection issues. Our allowance for doubtful accounts was zero at both March 31, 2017 and September 30, 2016 . Other current assets (in thousands) March 31, September 30, Ref 2017 2016 Prepaid insurance and benefits $ 332 $ 168 Total other prepaid expenses 425 374 Other current assets $ 757 $ 542 Equipment and improvements, net (in thousands) March 31, September 30, Ref 2017 2016 Furniture and equipment $ 670 $ 638 Computer equipment 330 202 Computer software (a) 800 309 Leasehold improvements 38 38 Total fixed assets 1,838 1,187 Less accumulated depreciation and amortization (718 ) (543 ) Equipment and improvements, net (b) $ 1,120 $ 644 Ref (a): The Company is in the process of configuring a new Enterprise Resource Planning system. Capitalized costs include software licenses and implementation labor related to application development. Since the asset has not been placed in service, no depreciation related to the asset has been recognized. Prior to the asset being placed in service a useful life will be determined. Ref (b): Equipment and improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful asset lives ( 3 to 7 ) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Maintenance and repair costs are expensed as incurred. Goodwill and Intangibles (in thousands) Ref Goodwill Customer Relationships (a) Non Compete Agreement (a) Trade Name (a) Total Gross Balance at September 30, 2016 $ 34,745 $ 7,247 $ 1,370 $ — $ 43,362 Measurement period adjustment (b) (8,756 ) 9,379 (890 ) 517 250 Adjusted Gross Balance at March 31, 2017 $ 25,989 $ 16,626 $ 480 $ 517 $ 43,612 (in thousands) Ref Goodwill Customer Relationships (a) Non Compete Agreement (a) Trade Name (a) Total Accumulated amortization at September 30, 2016 $ — $ (993 ) $ (65 ) $ — $ (1,058 ) Prior period amortization adjustment (b) — 300 45 (21 ) 324 Current period amortization — (830 ) (24 ) (27 ) (881 ) Total amortization — (1,523 ) (44 ) (48 ) (1,615 ) Net balance at March 31, 2017 (c) $ 25,989 $ 15,103 $ 436 $ 469 $ 41,997 Ref (a): Intangible assets subject to amortization. Ref (b): See Note 11 for discussion on measurement and amortization period adjustments Ref (c): Estimated amortization expense for future years: (in thousands) Year 1 $ 1,762 Year 2 1,762 Year 3 1,762 Year 4 1,762 Year 5 1,762 Thereafter 7,198 $ 16,008 Ref (a): Intangibles acquired during the acquisition of Danya included customer relationships, a covenant not to compete, and a trade name. The intangibles are amortized on a straight-line basis over the estimated useful lives ( 10 years ). Net amount of amortization expense for the quarter ended March 31, 2017 was $.4 million . The amortization for the six months ended March 31, 2017 was $.6 million . Accounts payable, accrued expenses and other current liabilities (in thousands) March 31, September 30, Ref 2017 2016 Accounts payable $ 5,714 $ 4,324 Accrued benefits 1,194 1,197 Accrued bonus and incentive compensation 173 508 Accrued workers compensation insurance 1,035 981 Other accrued expenses 595 126 Accounts payable, accrued expenses, and other current liabilities $ 8,711 $ 7,136 Debt obligations (in thousands) March 31, September 30, Ref 2017 2016 Gross bank debt obligations (a) 21,563 23,438 Less unamortized debt issuance costs (1,095 ) (1,222 ) Net bank debt obligation 20,468 22,216 Less current portion of bank debt obligations (3,580 ) (3,560 ) Long term portion of bank debt obligation $ 16,888 $ 18,656 Ref (a): Maturity of the bank debt is as follows: Year 1 $ 3,750 Year 2 3,750 Year 3 3,750 Year 4 3,750 Year 5 6,563 Total net bank debt obligation $ 21,563 Other Income (Expense) (in thousands) (in thousands) Three Months Ended Six Months Ended March 31, March 31, Ref 2017 2016 2017 2016 Interest (expense), net (a) $ (215 ) $ — $ (440 ) $ — Amortization of deferred financing costs (b) (67 ) — (127 ) — Change in fair value of derivative financial instruments 27 — (52 ) Other income (expense), net (127 ) — (702 ) Other income (expense), net $ (255 ) $ (127 ) $ (619 ) $ (702 ) Ref (a): Interest expense on borrowing related to acquisition of Danya Ref (b): Amortizations of expenses related to securing financing to acquire Danya

Credit Facilities

Credit Facilities	6 Months Ended
Credit Facilities	Mar. 31, 2017
Debt Disclosure [Abstract]
Credit Facilities	Credit Facilities A summary of our loan facilities and subordinated debt financing as of March 31, 2017 is as follows: ($ in Millions) As of March 31, 2017 Lender Arrangement Loan Balance Interest Maturity Date Fifth Third Bank Secured term loan $25 million ceiling (a) $ 21.6 LIBOR* + 3.0% 05/01/21 Fifth Third Bank Secured revolving line of credit $10 million ceiling (b) $ — LIBOR* + 3.0% 05/01/18 * LIBOR rate as of March 31, 2017 was 1.15% (a) Represents the principal amounts payable on our Term Loan with Fifth Third Bank that partially funded our acquisition of Danya on May 3, 2016. The $25.0 million term loan from Fifth Third Bank was funded at closing and is secured by liens on substantially all of the assets of the Company. The principal of the Term Loan is payable in fifty-nine consecutive monthly installments of $312,500 beginning on June 1, 2016 with the remaining balance due on May 1, 2021. The Term Loan agreement requires compliance with a number of financial covenants and contains restrictions on our ability to engage in certain transactions. We are in compliance with all loan covenants and restrictions. Among other matters, we must comply with limitations on: granting liens; incurring other indebtedness; maintenance of assets; investments in other entities and extensions of credit; mergers and consolidations; and changes in nature of business. The loan agreement also requires us to comply with certain financial covenants including: (i) a minimum fixed charge coverage ratio of at least 1.35 to 1.0 commencing with the quarter ending June 30, 2016, and for all subsequent periods, and (ii) a Funded Indebtedness to Adjusted EBITDA ratio not exceeding the ratio of 2.99 to 1.0 at closing and thereafter a ratio ranging from 3.5 to 1.0 for the period through September 30, 2016 to 2.5 to 1.0 for the period ending September 30, 2018. In addition to monthly payments of the outstanding indebtedness, the loan agreement also requires prepayments of a percentage of excess cash flow, as defined in the loan agreement. Accordingly, a portion of our cash flow from operations will be dedicated to the repayment of our indebtedness. (b) The secured revolving line of credit from Fifth Third Bank has a ceiling of up to $10.0 million , of which $5.0 million was drawn at closing to cover partial financing of the Danya purchase. Borrowing on the line of credit is secured by liens on substantially all of the assets of the Company. At December 31, 2016, DLH had repaid all draws on our revolving line of credit with no remaining balance. The Company's total borrowing availability, based on eligible accounts receivables at March 31, 2017 , was $6.3 million . This capacity was comprised of $0.9 million in a stand-by letter of credit and unused borrowing capacity of $5.4 million . The revolving line of credit is subject to loan covenants as described above in the Term Loan, and DLH is fully compliant with those covenants. Management believes that: (a) cash and cash equivalents of approximately $3.1 million as of March 31, 2017 ; (b) the amount available under its line of credit that was in effect at March 31, 2017 ; and (c) planned operating cash flow should be sufficient to support the Company's operations for twelve months from the date of these financial statements.

Significant Accounting Policies

Significant Accounting Policies	6 Months Ended
Significant Accounting Policies	Mar. 31, 2017
Accounting Policies [Abstract]
Significant Accounting Policies	Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include valuation of goodwill and intangible assets, valuation allowances established against accounts receivable and deferred tax assets, measurement of loss development on workers’ compensation claims, and fair value of derivatives. We evaluate these estimates and judgments on an ongoing basis and base our estimates on historical experience, current and expected future outcomes, third-party evaluations and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. We revise material accounting estimates if changes occur, such as more experience is acquired, additional information is obtained, or there is new information on which an estimate was or can be based. Actual results could differ from those estimates. In particular, a material reduction in the fair value of goodwill could have a material adverse effect on the Company’s financial position and results of operations. We account for the effect of a change in accounting estimate during the period in which the change occurs. Revenue Recognition DLH’s revenue is derived from professional and other specialized service offerings to US Government agencies through a variety of contracts, some of which are fixed-price in nature and/or sourced through Federal Supply Schedules administered by the General Services Administration (“GSA”) at fixed unit rates or hourly arrangements. We generally operate as a prime contractor, but have also entered into contracts as a subcontractor. The recognition of revenue from fixed rates is based upon objective criteria that generally do not require significant estimates. DLH recognizes and records revenue on government contracts when it is realized, or realizable, and earned. DLH considers these requirements met when: (a) persuasive evidence of an arrangement exists; (b) the services have been delivered to the customer; (c) the sales price is fixed or determinable and free of contingencies or significant uncertainties; and (d) collectibility is reasonably assured. Business Combinations In accordance with Accounting Standards Codifications 805, "Business Combinations" ("ASC 805") the Company records acquisitions under the purchase method of accounting, under which the acquisition purchase price is allocated to the assets acquired and the liabilities assumed based upon the respective fair values. The Company utilizes some estimates and in some instances, may retain the services of an independent third-party valuation firm to assist in determining the fair values of assets acquired, liabilities, assumed, and contingent considerations granted. Such estimates and valuation require the Company to make significant assumptions. These assumptions may include projections of future events and operating performance. Goodwill and other intangible assets We have used the acquisition method of accounting for the Danya transaction, whereby the assets acquired and liabilities assumed are recognized based upon their estimated fair values at the acquisition date. The fair values of assets acquired and liabilities assumed are based on the information that was available as of the acquisition date. The Company believes the information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed. The Company finalized the fair values as of December 31, 2016. The finalized valuation allocation is shown in Note 11 Business Combinations. On the basis of the estimated assets acquired, the Company amortized $0.4 million and $0.6 million for the three and six months ended March 31, 2017 , respectively. Year to date amortization was affected by the finalized purchase price adjustment further discussed in Note 11. DLH continues to review its goodwill and other intangible assets for possible impairment or loss of value at least annually or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. At September 30, 2016 , we performed a goodwill impairment evaluation on the year-end carrying value of approximately $35 million . We performed both a qualitative and quantitative assessment of factors to determine whether it was necessary to perform the goodwill impairment test. Based on the results of the work performed, the Company has concluded that no impairment loss was warranted at September 30, 2016 . For the six months ended March 31, 2017 , the Company determined that no change in business conditions occurred which would have a material adverse effect on the valuation of goodwill. Notwithstanding this evaluation, factors including non-renewal of a major contract or other substantial changes in business conditions could have a material adverse effect on the valuation of goodwill in future periods and the resulting charge could be material to future periods’ results of operations. Long Lived Assets The Company acquired certain long lived intangibles assets as part of the acquisition of Danya. These assets are estimated at a fair value and amortized on a straight-line basis over their assessed useful lives. The assessed useful lives of the assets are 10 years. Income Taxes DLH accounts for income taxes in accordance with the liability method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reflected on the consolidated balance sheet when it is determined that it is more likely than not that the asset will be realized. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon the technical merits, it is "more-likely-than-not" that the position will be sustained upon examination. We had no uncertain tax positions at either March 31, 2017 or September 30, 2016 . We report interest and penalties as a component of income tax expense. In the fiscal quarters ended March 31, 2017 and March 31, 2016, we recognized no interest and no penalties related to income taxes. Stock-based Equity Compensation The Company uses the fair value-based method for stock-based equity compensation. Options issued are designated as either an incentive stock or a non-statutory stock option. No option may be granted with a term of more than 10 years from the date of grant. Option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued common shares. All awards to employees and non-employees are recorded at fair value on the date of the grant and expensed over the period of vesting. The Company uses a binomial option pricing model to estimate the fair value of each stock option at the date of grant. Any consideration paid by the option holders to purchase shares is credited to capital stock. Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. We maintain cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 . Deposits held with financial institutions may exceed the $250,000 limit. Earnings (Loss) per Share Basic earnings per share is calculated by dividing income available to common shareholders by the weighted average number of common stock outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income (loss) available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method.

Stock-based Compensatin, Equity

Stock-based Compensatin, Equity Grants, and Warrants	6 Months Ended
Stock-based Compensatin, Equity Grants, and Warrants	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-based Compensation, Equity Grants, and Warrants	Stock-based Compensation, Equity Grants, and Warrants Stock-based compensation expense All grants of equity represented in these financial statements through the period ended March 31, 2016, were made under the 2006 Long Term Incentive Plan. The 2006 plan expired on February 25, 2016, upon shareholders' approval of the 2016 Omnibus Equity Incentive Plan (collectively, the "Plans"). As of March 31, 2017 , there were 0.5 million shares available for grant. Options issued under the Plans were designated as either an incentive stock or a non-statutory stock option. No option was granted with a term of more than 10 years from the date of grant. Exercisability of option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued shares. Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our statement of operations: (in thousands) (in thousands) Three Months Ended Six Months Ended Ref March 31, March 31, 2017 2016 2017 2016 DLH employees $ 56 $ 6 $ 63 $ 14 Non-employee directors (a) 8 4 486 328 Total stock option expense $ 64 $ 10 $ 549 $ 342 Ref (a): Equity grants of restricted stock, in accordance with DLH compensation policy for non-employee directors. The shares granted in the first quarters of fiscal years 2016 and 2015 vested immediately, and stock expense of approximately $456 thousand and $304 thousand , respectively were recognized accordingly. Unrecognized stock-based compensation expense (in thousands) Six Months Ended March 31, Ref 2017 2016 Unrecognized expense for DLH employees (a) $ 404 $ 30 Unrecognized expense for non-employee directors (b) 8 71 Total unrecognized expense $ 412 $ 101 Ref (a): Compensation expense for the portion of equity awards for which the requisite service has not been rendered is recognized as the requisite service is rendered. The compensation expense for that portion of awards has been based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance. Ref (b): Unrecognized stock expense related to prior years equity grants of restricted stock to non-employee directors, based on performance criteria, in accordance with DLH compensation policy for non-employee directors. The shares will vest and expense will be recorded upon future satisfaction of specified performance. Stock option activity for the six months ended March 31, 2017 The aggregate intrinsic value in the table below represents the total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their in the money options on those dates. This amount will change based on the fair market value of the Company’s stock. (in years) Weighted Weighted Average (in thousands) (in thousands) Average Remaining Aggregate Number of Exercise Contractual Intrinsic Ref Shares Price Term Value Options outstanding, September 30, 2016 2,226 $1.43 5.8 $ 7,581 Canceled — Granted (a) 400 $5.94 Exercised (10 ) $3.00 Options outstanding, March 31, 2017 2,616 $3.48 6.6 $ 9,121 Ref (a): Options granted to DLH employees were valued using a Black Scholes calculation, under the following criteria: • average yield rate of 2.46% was used • contractual lives and expected lives were 10 years for all grants • probability of exercise was based on reaching the market price • monthly price volatility factor of 12% was used • no dividend yield was contemplated The resulting fair values ranged from $0.93 to $1.47, depending on the market measure of the stock price Stock options shares outstanding, vested and unvested for the period ended Number of Shares (in thousands) March 31, September 30, Ref 2017 2016 Vested and exercisable 1,949 1,909 Unvested (a) 667 317 Options outstanding 2,616 2,226 Ref (a): Certain awards vest upon satisfaction of certain performance criteria.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	6 Months Ended
Fair Value of Financial Instruments	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	Fair Value of Financial Instruments The Company measures certain financial assets and liabilities at fair value on a recurring basis. The Company determines fair value based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three level hierarchy. These levels are: Level 1 - Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2 - Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3 - Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. Observable inputs are based on market data obtained from independent sources. In May 2016 we issued warrants to purchase 53,619 shares of common stock. Using a binomial pricing model, we valued the warrants at $256 thousand and $204 thousand as of March 31, 2017 and September 30, 2016, respectively. Assumptions used in valuing the warrants as of March 31, 2017 included: Risk free interest rate 1.68 % Contractual term 5 years Dividend yield — % Expected lives 4.1 years Expected volatility 144 % Fair value per warrant $5.29 The Company recorded a benefit on the revaluation of the warrant liability of $27 thousand for the quarter ended March 31, 2017. For the six months ended March 31, 2017 the company recorded a charge of $52 thousand related to the revaluation of the warranty liability. The benefit is recorded and classified in other income (expense) in the accompanying consolidated statements of operations. The Company has issued warrants to purchase stock as described above. The fair value of the warrants was estimated by management in the absence of a readily ascertainable market value as follows: December 31, 2016 Level 1 Level 2 Level 3 Warrant issued to acquire common stock $ — $ — $ 283 March 31, 2017 Level 1 Level 2 Level 3 Warrant issued to acquire common stock $ 0 $ 0 $ 256 Change in Level 3 liabilities for the year ended March 31, 2017: Beginning Balance Realized/Unrealized Purchases and Ending Balance Change in Realized (gains) losses for liabilities held at September 30, 2016 (Gains) Losses Settlements March 31, 2017 March 31, 2017 Warrant issued to acquire common stock $ 204 $ 52 $ — $ 256 $ 52 The Company has other financial instruments, including accounts receivable, accounts payable, loan payable, notes payable, and accrued expense. Due to the short term nature of these instruments, DLH estimates that the fair value of all financial instruments at March 31, 2017 and September 30, 2016 does not differ materially from the aggregate carrying values of these financial instruments recorded in the accompanying consolidated balance sheets.

Earnings Per Share

Earnings Per Share	6 Months Ended
Earnings Per Share	Mar. 31, 2017
Earnings Per Share [Abstract]
Earnings Per Share	Earnings (Loss) Per Share Basic earnings per share is calculated by dividing income available to common shareholders by the weighted average number of common shares outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method. (in thousands) Three Months Ended Six Months Ended March 31, March 31, 2017 2016 2017 2016 Numerator: Net income $ 979 $ 337 $ 1,303 $ 221 Denominator: Denominator for basic net income (loss) per share - weighted-average outstanding shares 11,249 9,717 11,225 9,642 Effect of dilutive securities: Stock options and restricted stock 1,496 949 1,488 898 Denominator for diluted net income per share - weighted-average outstanding shares 12,745 10,666 12,713 10,540 Net income per share - basic $ 0.09 $ 0.04 $ 0.12 $ 0.02 Net income per share - diluted $ 0.08 $ 0.03 $ 0.10 $ 0.02

Commitment and Contingencies

Commitment and Contingencies	6 Months Ended
Commitment and Contingencies	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Payments Due By Period Obligations Next 12 2-3 4-5 More than 5 (Amounts in thousands) Ref Total Months Years Years Years Debt Obligations (a) $ 21,563 $ 3,750 $ 7,500 $ 10,313 Facility leases (b) $ 4,122 $ 900 $ 1,819 $ 694 $ 709 Equipment capital leases (c) 24 24 — — — Equipment operating leases (d) 459 102 204 153 — Total Obligations $ 26,168 $ 4,776 $ 9,523 $ 11,160 $ 709 Ref (a): Amounts due under term loan agreement described in Note 5. Ref (b):Represents amounts committed on facility lease agreements as of March 31, 2017 . Ref (c): Represents remaining amounts committed as of March 31, 2017 on a capital lease arrangement. Ref (d): Represents remaining amounts committed as of March 31, 2017 on operating lease arrangements.. Workers Compensation We accrue workers compensation expense based on claims submitted, applying actuarial loss development factors to estimate the costs incurred but not yet recorded. Our accrued liability for claims development as of March 31, 2017 and September 30, 2016 was $1.04 million and 0.98 million , respectively. Legal Proceedings The Company is not aware of any pending or threatened litigation that it believes is reasonably likely to have a material adverse effect on its results of operations, financial position or cash flows.

Business Combinations

Business Combinations	6 Months Ended
Business Combinations	Mar. 31, 2017
Business Combinations [Abstract]
Business Combinations	Business Combinations: Acquisition of Danya International, LLC On May 3, 2016, the Company acquired 100% of the equity interests of Dayna International, LLC for a purchase price of $38.75 million . The acquisition was financed through a combination of: • borrowings of $30.0 million under the Company’s senior credit facility, • cash on hand of approximately $3.75 million , • 670,242 restricted shares of DLH common stock, valued at $2.5 million based on the 20 day volume-weighted average price (VWAP) of DLH stock, or $3.73 per share, and • $2.5 million pursuant to a subordinated loan arrangement with the Company’s largest stockholder. As of March 31, 2017 the Seller beneficially owns approximately 6.0% of the Company’s outstanding shares. The acquisition of Danya International is consistent with the Company’s growth strategy, which calls for the development of new customers and service offerings both organically and through mergers and acquisitions. We used the acquisition method of accounting for this transaction, whereby the assets acquired and liabilities assumed are recognized based upon their estimated fair values at the acquisition date. The total base purchase price for Danya was $38.75 million , with adjustments as necessary based on a finalized working capital calculation compared to the target prescribed in the acquisition agreement as amended. A $0.47 million working capital adjustment to the purchase price was finalized in December 2016, and the final $0.25 million payment made to the seller. As of December 31, 2016 the Company completed it valuation of the transaction and finalized the adjustments to the estimated values recognized at September 30, 2016. Therefore the Company recognized an increase to the fair value of intangibles in the amount of $9.0 million with a corresponding decrease to goodwill. Additionally, the change to the estimated amounts resulted in a decrease in amortization of $.3 million in the quarter ended December 31, 2016. The change was based on the final valuation which calculated the value for each type of intangible asset. See Note 4 for further presentation. We allocated total acquisition consideration and the finalized allocation of fair value to the related assets and liabilities as follows: (Amounts in thousands) Cash $ 36,720 Common stock, fair value 2,500 Total Consideration $ 39,220 (Amounts in thousands) Net assets acquired Cash and cash equivalents $ 4,009 Accounts receivable 5,712 Other current assets 444 Total current assets 10,165 Accounts payable and accrued expenses (5,013 ) Payroll liabilities (1,432 ) Net working capital surplus 3,720 Property and equipment, net 403 Intangible assets: Customer relationships 16,626 Covenant not to compete 480 Trade name 517 Other long term assets 81 Net identifiable assets acquired 18,107 Goodwill 17,393 Net assets acquired $ 39,220 During the six months ended March 31, 2017, Danya contributed approximately $20.5 million of revenue and $1.2 million income from operations. The following table presents certain results for the three and six months ended March 31, 2017 and 2016 as though the acquisition of Danya had occurred on October 1, 2015. The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of our results if the acquisition had taken place on that date. The pro forma results presented below include amortization charges for acquired intangible assets and adjustments to interest expense incurred and exclude related acquisition expenses. (in thousands) (in thousands) Three Months Ended Six Months Ended March 31, March 31, Pro forma results 2017 2016 2017 2016 Revenue $ 29,905 $ 28,987 $ 56,016 $ 57,495 Net income $ 979 $ 821 $ 1,303 $ 426 Number of shares outstanding - basic 11,249 11,098 11,225 11,023 Number of shares outstanding - diluted 12,745 12,047 12,713 11,921 Basic earnings per share $ 0.09 $0.07 $0.12 $0.04 Diluted earnings per share $ 0.08 $0.07 $0.10 $0.04

Related Party Disclosure

Related Party Disclosure	6 Months Ended
Related Party Disclosure	Mar. 31, 2017
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions. The Company has determined that for the quarter ended March 31, 2017 there were no related party transactions that have occurred which require disclosure through the date that these financial statements were issued.

Subsequent Events

Subsequent Events	6 Months Ended
Subsequent Events	Mar. 31, 2017
Subsequent Events [Abstract]
Subsequent Events	Subsequent Events. Management has evaluated subsequent events through the date that the Company's financial statements were issued. Based on this evaluation, the Company has determined that no other subsequent events have occurred which require disclosure through the date that these financial statements were issued.

Significant Accounting Polici19

Significant Accounting Policies (Policies)	6 Months Ended
Significant Accounting Policies (Policies)	Mar. 31, 2017
Accounting Policies [Abstract]
New Accounting Pronouncements	New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued guidance outlining a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers that supersedes most current revenue recognition guidance. This guidance requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, this guidance expands related disclosure requirements. The FASB has continued to issue periodic updates to this guidance, to further define the application of the changes. Public business entities should apply the guidance to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is evaluating the impact of this guidance. In June 2014, the FASB issued guidance related to accounting for share-based payments for certain performance stock awards. In March 2016, the FASB issued updated guidance intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements. The amendments in this update affect all entities that issue share-based payment awards to their employees. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has adopted this guidance and concluded that it will not significantly affect the Company. In September 2015, the FASB issued guidance regarding business combinations for which the accounting is incomplete by the end of the reporting period in which the combination occurs, and during the measurement period have an adjustment to provisional amounts recognized. To simplify the accounting for adjustments made to provisional amounts recognized in a business combination, the amendments in this update eliminate the requirement to retrospectively account for those adjustments. The amendments in this update are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this update, with earlier application permitted for financial statements that have not been issued. Refer to Note 4 for the impact of the adoption of this guidance. In February 2016, the FASB issued guidance intended to improve financial reporting for leasing transactions with a lease term of more than 12 months. The new guidance will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The recognition, measurement, and presentation of expenses and cash flow arising from a lease by a lessee primarily will depend on its classification as a finance or operating lease. However, unlike current GAAP - which requires only capital leases to be recognized on the balance sheet, the new guidance will require both types of leases to be recognized on the balance sheet. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. The Company is evaluating the impact of this guidance.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates include valuation of goodwill and intangible assets, valuation allowances established against accounts receivable and deferred tax assets, measurement of loss development on workers’ compensation claims, and fair value of derivatives. We evaluate these estimates and judgments on an ongoing basis and base our estimates on historical experience, current and expected future outcomes, third-party evaluations and various other assumptions that we believe are reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. We revise material accounting estimates if changes occur, such as more experience is acquired, additional information is obtained, or there is new information on which an estimate was or can be based. Actual results could differ from those estimates. In particular, a material reduction in the fair value of goodwill could have a material adverse effect on the Company’s financial position and results of operations. We account for the effect of a change in accounting estimate during the period in which the change occurs.
Revenue Recognition	Revenue Recognition DLH’s revenue is derived from professional and other specialized service offerings to US Government agencies through a variety of contracts, some of which are fixed-price in nature and/or sourced through Federal Supply Schedules administered by the General Services Administration (“GSA”) at fixed unit rates or hourly arrangements. We generally operate as a prime contractor, but have also entered into contracts as a subcontractor. The recognition of revenue from fixed rates is based upon objective criteria that generally do not require significant estimates. DLH recognizes and records revenue on government contracts when it is realized, or realizable, and earned. DLH considers these requirements met when: (a) persuasive evidence of an arrangement exists; (b) the services have been delivered to the customer; (c) the sales price is fixed or determinable and free of contingencies or significant uncertainties; and (d) collectibility is reasonably assured. Business Combinations In accordance with Accounting Standards Codifications 805, "Business Combinations" ("ASC 805") the Company records acquisitions under the purchase method of accounting, under which the acquisition purchase price is allocated to the assets acquired and the liabilities assumed based upon the respective fair values. The Company utilizes some estimates and in some instances, may retain the services of an independent third-party valuation firm to assist in determining the fair values of assets acquired, liabilities, assumed, and contingent considerations granted. Such estimates and valuation require the Company to make significant assumptions. These assumptions may include projections of future events and operating performance.
Goodwill and other intangible assets	Goodwill and other intangible assets We have used the acquisition method of accounting for the Danya transaction, whereby the assets acquired and liabilities assumed are recognized based upon their estimated fair values at the acquisition date. The fair values of assets acquired and liabilities assumed are based on the information that was available as of the acquisition date. The Company believes the information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed. The Company finalized the fair values as of December 31, 2016. The finalized valuation allocation is shown in Note 11 Business Combinations. On the basis of the estimated assets acquired, the Company amortized $0.4 million and $0.6 million for the three and six months ended March 31, 2017 , respectively. Year to date amortization was affected by the finalized purchase price adjustment further discussed in Note 11. DLH continues to review its goodwill and other intangible assets for possible impairment or loss of value at least annually or more frequently upon the occurrence of an event or when circumstances indicate that a reporting unit’s carrying amount is greater than its fair value. At September 30, 2016 , we performed a goodwill impairment evaluation on the year-end carrying value of approximately $35 million . We performed both a qualitative and quantitative assessment of factors to determine whether it was necessary to perform the goodwill impairment test. Based on the results of the work performed, the Company has concluded that no impairment loss was warranted at September 30, 2016 . For the six months ended March 31, 2017 , the Company determined that no change in business conditions occurred which would have a material adverse effect on the valuation of goodwill. Notwithstanding this evaluation, factors including non-renewal of a major contract or other substantial changes in business conditions could have a material adverse effect on the valuation of goodwill in future periods and the resulting charge could be material to future periods’ results of operations.
Income Taxes	Income Taxes DLH accounts for income taxes in accordance with the liability method, whereby deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are reflected on the consolidated balance sheet when it is determined that it is more likely than not that the asset will be realized. This guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some or all of the deferred tax asset will not be realized. We account for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon the technical merits, it is "more-likely-than-not" that the position will be sustained upon examination. We had no uncertain tax positions at either March 31, 2017 or September 30, 2016 . We report interest and penalties as a component of income tax expense. In the fiscal quarters ended March 31, 2017 and March 31, 2016, we recognized no interest and no penalties related to income taxes.
Long-lived Assets	Long Lived Assets The Company acquired certain long lived intangibles assets as part of the acquisition of Danya. These assets are estimated at a fair value and amortized on a straight-line basis over their assessed useful lives. The assessed useful lives of the assets are 10 years.
Stock-based Equity Compensation	Stock-based Equity Compensation The Company uses the fair value-based method for stock-based equity compensation. Options issued are designated as either an incentive stock or a non-statutory stock option. No option may be granted with a term of more than 10 years from the date of grant. Option awards may depend on achievement of certain performance measures determined by the Compensation Committee of our Board. Shares issued upon option exercise are newly issued common shares. All awards to employees and non-employees are recorded at fair value on the date of the grant and expensed over the period of vesting. The Company uses a binomial option pricing model to estimate the fair value of each stock option at the date of grant. Any consideration paid by the option holders to purchase shares is credited to capital stock.
Cash and Cash Equivalents	Cash and Cash Equivalents We consider all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. We maintain cash balances at financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 . Deposits held with financial institutions may exceed the $250,000 limit. Earnings (Loss) per Share Basic earnings per share is calculated by dividing income available to common shareholders by the weighted average number of common stock outstanding and restricted stock grants that vested or are likely to vest during the period. Diluted earnings per share is calculated by dividing income (loss) available to common shareholders by the weighted average number of basic common shares outstanding, adjusted to reflect potentially dilutive securities. Diluted earnings per share is calculated using the treasury stock method.

Supporting Financial Informat20

Supporting Financial Information (Tables)	6 Months Ended
Supporting Financial Information (Tables)	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of Accounts Receivable	Accounts receivable (in thousands) March 31, September 30, Ref 2017 2016 Billed receivables $ 7,459 $ 5,265 Unbilled receivables 1,412 1,372 Total accounts receivable 8,871 6,637 Less: Allowance for doubtful accounts (a) — — Accounts receivable, net $ 8,871 $ 6,637 Ref (a): Accounts receivable are non-interest bearing, unsecured and carried at fair value, which is net of an allowance for doubtful accounts. We evaluate our receivables on a quarterly basis and determine whether an allowance is appropriate based on specific collection issues. Our allowance for doubtful accounts was zero at both March 31, 2017 and September 30, 2016 .
Schedule of Other Current Assets	Other current assets (in thousands) March 31, September 30, Ref 2017 2016 Prepaid insurance and benefits $ 332 $ 168 Total other prepaid expenses 425 374 Other current assets $ 757 $ 542
Equipment and Improvemnts, Net	Equipment and improvements, net (in thousands) March 31, September 30, Ref 2017 2016 Furniture and equipment $ 670 $ 638 Computer equipment 330 202 Computer software (a) 800 309 Leasehold improvements 38 38 Total fixed assets 1,838 1,187 Less accumulated depreciation and amortization (718 ) (543 ) Equipment and improvements, net (b) $ 1,120 $ 644 Ref (a): The Company is in the process of configuring a new Enterprise Resource Planning system. Capitalized costs include software licenses and implementation labor related to application development. Since the asset has not been placed in service, no depreciation related to the asset has been recognized. Prior to the asset being placed in service a useful life will be determined. Ref (b): Equipment and improvements are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful asset lives ( 3 to 7 ) and the shorter of the initial lease term or estimated useful life for leasehold improvements. Maintenance and repair costs are expensed as incurred.
Schedule of Intangible Assets and Goodwill	Goodwill and Intangibles (in thousands) Ref Goodwill Customer Relationships (a) Non Compete Agreement (a) Trade Name (a) Total Gross Balance at September 30, 2016 $ 34,745 $ 7,247 $ 1,370 $ — $ 43,362 Measurement period adjustment (b) (8,756 ) 9,379 (890 ) 517 250 Adjusted Gross Balance at March 31, 2017 $ 25,989 $ 16,626 $ 480 $ 517 $ 43,612 (in thousands) Ref Goodwill Customer Relationships (a) Non Compete Agreement (a) Trade Name (a) Total Gross Balance at September 30, 2016 $ 34,745 $ 7,247 $ 1,370 $ — $ 43,362 Measurement period adjustment (b) (8,756 ) 9,379 (890 ) 517 250 Adjusted Gross Balance at March 31, 2017 $ 25,989 $ 16,626 $ 480 $ 517 $ 43,612 (in thousands) Ref Goodwill Customer Relationships (a) Non Compete Agreement (a) Trade Name (a) Total Accumulated amortization at September 30, 2016 $ — $ (993 ) $ (65 ) $ — $ (1,058 ) Prior period amortization adjustment (b) — 300 45 (21 ) 324 Current period amortization — (830 ) (24 ) (27 ) (881 ) Total amortization — (1,523 ) (44 ) (48 ) (1,615 ) Net balance at March 31, 2017 (c) $ 25,989 $ 15,103 $ 436 $ 469 $ 41,997 Ref (a): Intangible assets subject to amortization. Ref (b): See Note 11 for discussion on measurement and amortization period adjustments Ref (c): Estimated amortization expense for future years: (in thousands) Year 1 $ 1,762 Year 2 1,762 Year 3 1,762 Year 4 1,762 Year 5 1,762 Thereafter 7,198 $ 16,008 Ref (a): Intangibles acquired during the acquisition of Danya included customer relationships, a covenant not to compete, and a trade name. The intangibles are amortized on a straight-line basis over the estimated useful lives ( 10 years ). Net amount of amortization expense for the quarter ended March 31, 2017 was $.4 million . The amortization for the six months ended March 31, 2017 was $.6 million .
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense	Ref (c): Estimated amortization expense for future years: (in thousands) Year 1 $ 1,762 Year 2 1,762 Year 3 1,762 Year 4 1,762 Year 5 1,762 Thereafter 7,198 $ 16,008 Ref (a): Intangibles acquired during the acquisition of Danya included customer relationships, a covenant not to compete, and a trade name. The intangibles are amortized on a straight-line basis over the estimated useful lives ( 10 years ). Net amount of amortization expense for the quarter ended March 31, 2017 was $.4 million .
Accounts Payable, Accrued Expenses, and Other Current Liabilities	ccrued expenses and other current liabilities (in thousands) March 31, September 30, Ref 2017 2016 Accounts payable $ 5,714 $ 4,324 Accrued benefits 1,194 1,197 Accrued bonus and incentive compensation 173 508 Accrued workers compensation insurance 1,035 981 Other accrued expenses 595 126 Accounts payable, accrued expenses, and other current liabilities $ 8,711 $ 7,136
Long-term Debt Instruments	Debt obligations (in thousands) March 31, September 30, Ref 2017 2016 Gross bank debt obligations (a) 21,563 23,438 Less unamortized debt issuance costs (1,095 ) (1,222 ) Net bank debt obligation 20,468 22,216 Less current portion of bank debt obligations (3,580 ) (3,560 ) Long term portion of bank debt obligation $ 16,888 $ 18,656 Ref (a): Maturity of the bank debt is as follows: Year 1 $ 3,750 Year 2 3,750 Year 3 3,750 Year 4 3,750 Year 5 6,563 Total net bank debt obligation $ 21,563
Other Income (Expense)	Other Income (Expense) (in thousands) (in thousands) Three Months Ended Six Months Ended March 31, March 31, Ref 2017 2016 2017 2016 Interest (expense), net (a) $ (215 ) $ — $ (440 ) $ — Amortization of deferred financing costs (b) (67 ) — (127 ) — Change in fair value of derivative financial instruments 27 — (52 ) Other income (expense), net (127 ) — (702 ) Other income (expense), net $ (255 ) $ (127 ) $ (619 ) $ (702 ) Ref (a): Interest expense on borrowing related to acquisition of Danya Ref (b): Amortizations of expenses related to securing financing to acquire Danya

Credit Facilities (Tables)

Credit Facilities (Tables)	6 Months Ended
Credit Facilities (Tables)	Mar. 31, 2017
Debt Disclosure [Abstract]
Schedule of Credit Facilities	A summary of our loan facilities and subordinated debt financing as of March 31, 2017 is as follows: ($ in Millions) As of March 31, 2017 Lender Arrangement Loan Balance Interest Maturity Date Fifth Third Bank Secured term loan $25 million ceiling (a) $ 21.6 LIBOR* + 3.0% 05/01/21 Fifth Third Bank Secured revolving line of credit $10 million ceiling (b) $ — LIBOR* + 3.0% 05/01/18 * LIBOR rate as of March 31, 2017 was 1.15% (a) Represents the principal amounts payable on our Term Loan with Fifth Third Bank that partially funded our acquisition of Danya on May 3, 2016. The $25.0 million term loan from Fifth Third Bank was funded at closing and is secured by liens on substantially all of the assets of the Company. The principal of the Term Loan is payable in fifty-nine consecutive monthly installments of $312,500 beginning on June 1, 2016 with the remaining balance due on May 1, 2021. The Term Loan agreement requires compliance with a number of financial covenants and contains restrictions on our ability to engage in certain transactions. We are in compliance with all loan covenants and restrictions. Among other matters, we must comply with limitations on: granting liens; incurring other indebtedness; maintenance of assets; investments in other entities and extensions of credit; mergers and consolidations; and changes in nature of business. The loan agreement also requires us to comply with certain financial covenants including: (i) a minimum fixed charge coverage ratio of at least 1.35 to 1.0 commencing with the quarter ending June 30, 2016, and for all subsequent periods, and (ii) a Funded Indebtedness to Adjusted EBITDA ratio not exceeding the ratio of 2.99 to 1.0 at closing and thereafter a ratio ranging from 3.5 to 1.0 for the period through September 30, 2016 to 2.5 to 1.0 for the period ending September 30, 2018. In addition to monthly payments of the outstanding indebtedness, the loan agreement also requires prepayments of a percentage of excess cash flow, as defined in the loan agreement. Accordingly, a portion of our cash flow from operations will be dedicated to the repayment of our indebtedness. (b) The secured revolving line of credit from Fifth Third Bank has a ceiling of up to $10.0 million , of which $5.0 million was drawn at closing to cover partial financing of the Danya purchase. Borrowing on the line of credit is secured by liens on substantially all of the assets of the Company. At December 31, 2016, DLH had repaid all draws on our revolving line of credit with no remaining balance. The Company's total borrowing availability, based on eligible accounts receivables at March 31, 2017 , was $6.3 million . This capacity was comprised of $0.9 million in a stand-by letter of credit and unused borrowing capacity of $5.4 million . The revolving line of credit is subject to loan covenants as described above in the Term Loan, and DLH is fully compliant with those covenants. Management believes that: (a) cash and cash equivalents of approximately $3.1 million as of March 31, 2017 ; (b) the amount available under its line of credit that was in effect at March 31, 2017 ; and (c) planned operating cash flow should be sufficient to support the Company's operations for twelve months from the date of these financial statements.

Stock-based Compensation, Equit

Stock-based Compensation, Equity Grants, and Warrants (Tables)	6 Months Ended
	Mar. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-based Compensation Expense	Stock-based compensation expense, shown in the table below, is recorded in general and administrative expenses included in our statement of operations: (in thousands) (in thousands) Three Months Ended Six Months Ended Ref March 31, March 31, 2017 2016 2017 2016 DLH employees $ 56 $ 6 $ 63 $ 14 Non-employee directors (a) 8 4 486 328 Total stock option expense $ 64 $ 10 $ 549 $ 342 Ref (a): Equity grants of restricted stock, in accordance with DLH compensation policy for non-employee directors. The shares granted in the first quarters of fiscal years 2016 and 2015 vested immediately, and stock expense of approximately $456 thousand and $304 thousand , respectively were recognized accordingly. Unrecognized stock-based compensation expense (in thousands) Six Months Ended March 31, Ref 2017 2016 Unrecognized expense for DLH employees (a) $ 404 $ 30 Unrecognized expense for non-employee directors (b) 8 71 Total unrecognized expense $ 412 $ 101 Ref (a): Compensation expense for the portion of equity awards for which the requisite service has not been rendered is recognized as the requisite service is rendered. The compensation expense for that portion of awards has been based on the grant-date fair value of those awards as calculated for recognition purposes under applicable guidance. Ref (b): Unrecognized stock expense related to prior years equity grants of restricted stock to non-employee directors, based on performance criteria, in accordance with DLH compensation policy for non-employee directors. The shares will vest and expense will be recorded upon future satisfaction of specified performance.
Stock Option Activity	The aggregate intrinsic value in the table below represents the total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of the period and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their in the money options on those dates. This amount will change based on the fair market value of the Company’s stock. (in years) Weighted Weighted Average (in thousands) (in thousands) Average Remaining Aggregate Number of Exercise Contractual Intrinsic Ref Shares Price Term Value Options outstanding, September 30, 2016 2,226 $1.43 5.8 $ 7,581 Canceled — Granted (a) 400 $5.94 Exercised (10 ) $3.00 Options outstanding, March 31, 2017 2,616 $3.48 6.6 $ 9,121
Stock Option Shares Outstanding, Vested and Expected to Vest	Stock options shares outstanding, vested and unvested for the period ended Number of Shares (in thousands) March 31, September 30, Ref 2017 2016 Vested and exercisable 1,949 1,909 Unvested (a) 667 317 Options outstanding 2,616 2,226 Ref (a): Certain awards vest upon satisfaction of certain performance criteria.

Fair Value of Financial Instr23

Fair Value of Financial Instruments (Tables)	6 Months Ended
Fair Value of Financial Instruments (Tables)	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value, Liabilities Measured on Recurring Basis	The Company has issued warrants to purchase stock as described above. The fair value of the warrants was estimated by management in the absence of a readily ascertainable market value as follows: December 31, 2016 Level 1 Level 2 Level 3 Warrant issued to acquire common stock $ — $ — $ 283 March 31, 2017 Level 1 Level 2 Level 3 Warrant issued to acquire common stock $ 0 $ 0 $ 256
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques	Assumptions used in valuing the warrants as of March 31, 2017 included: Risk free interest rate 1.68 % Contractual term 5 years Dividend yield — % Expected lives 4.1 years Expected volatility 144 % Fair value per warrant $5.29
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation	Change in Level 3 liabilities for the year ended March 31, 2017: Beginning Balance Realized/Unrealized Purchases and Ending Balance Change in Realized (gains) losses for liabilities held at September 30, 2016 (Gains) Losses Settlements March 31, 2017 March 31, 2017 Warrant issued to acquire common stock $ 204 $ 52 $ — $ 256 $ 52

Earnings Per Share (Tables)

Earnings Per Share (Tables)	6 Months Ended
Earnings Per Share (Tables)	Mar. 31, 2017
Earnings Per Share [Abstract]
Diluted earnings per share	Diluted earnings per share is calculated using the treasury stock method. (in thousands) Three Months Ended Six Months Ended March 31, March 31, 2017 2016 2017 2016 Numerator: Net income $ 979 $ 337 $ 1,303 $ 221 Denominator: Denominator for basic net income (loss) per share - weighted-average outstanding shares 11,249 9,717 11,225 9,642 Effect of dilutive securities: Stock options and restricted stock 1,496 949 1,488 898 Denominator for diluted net income per share - weighted-average outstanding shares 12,745 10,666 12,713 10,540 Net income per share - basic $ 0.09 $ 0.04 $ 0.12 $ 0.02 Net income per share - diluted $ 0.08 $ 0.03 $ 0.10 $ 0.02

Commitment and Contingencies (T

Commitment and Contingencies (Tables)	6 Months Ended
Commitment and Contingencies (Tables)	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Contractual Obligation, Fiscal Year Maturity Schedule	Payments Due By Period Obligations Next 12 2-3 4-5 More than 5 (Amounts in thousands) Ref Total Months Years Years Years Debt Obligations (a) $ 21,563 $ 3,750 $ 7,500 $ 10,313 Facility leases (b) $ 4,122 $ 900 $ 1,819 $ 694 $ 709 Equipment capital leases (c) 24 24 — — — Equipment operating leases (d) 459 102 204 153 — Total Obligations $ 26,168 $ 4,776 $ 9,523 $ 11,160 $ 709 Ref (a): Amounts due under term loan agreement described in Note 5. Ref (b):Represents amounts committed on facility lease agreements as of March 31, 2017 . Ref (c): Represents remaining amounts committed as of March 31, 2017 on a capital lease arrangement. Ref (d): Represents remaining amounts committed as of March 31, 2017 on operating lease arrangements..

Business Combinations (Tables)

Business Combinations (Tables)	6 Months Ended
Business Combinations (Tables)	Mar. 31, 2017
Business Combinations [Abstract]
Schedule of Business Acquisitions, by Acquisition	e allocated total acquisition consideration and the finalized allocation of fair value to the related assets and liabilities as follows: (Amounts in thousands) Cash $ 36,720 Common stock, fair value 2,500 Total Consideration $ 39,220 (Amounts in thousands) Net assets acquired Cash and cash equivalents $ 4,009 Accounts receivable 5,712 Other current assets 444 Total current assets 10,165 Accounts payable and accrued expenses (5,013 ) Payroll liabilities (1,432 ) Net working capital surplus 3,720 Property and equipment, net 403 Intangible assets: Customer relationships 16,626 Covenant not to compete 480 Trade name 517 Other long term assets 81 Net identifiable assets acquired 18,107 Goodwill 17,393 Net assets acquired $ 39,220
Business Acquisition, Pro Forma Information	The pro forma results presented below include amortization charges for acquired intangible assets and adjustments to interest expense incurred and exclude related acquisition expenses. (in thousands) (in thousands) Three Months Ended Six Months Ended March 31, March 31, Pro forma results 2017 2016 2017 2016 Revenue $ 29,905 $ 28,987 $ 56,016 $ 57,495 Net income $ 979 $ 821 $ 1,303 $ 426 Number of shares outstanding - basic 11,249 11,098 11,225 11,023 Number of shares outstanding - diluted 12,745 12,047 12,713 11,921 Basic earnings per share $ 0.09 $0.07 $0.12 $0.04 Diluted earnings per share $ 0.08 $0.07 $0.10 $0.04

Business Overview (Details)

Business Overview (Details)	6 Months Ended
Business Overview (Details)	Mar. 31, 2017employeelocation	Mar. 31, 2016
Concentration Risk [Line Items]
Number of employees (employee) \| employee	1,400
Minimum number of locations in which entity operates (location) \| location	30
US Government [Member] \| Revenue concentration \| Customer concentration
Concentration Risk [Line Items]
Concentration risk percentage (percent)	100.00%
Human Services and Solutions [Member] \| Revenue concentration \| Customer concentration
Concentration Risk [Line Items]
Concentration risk percentage (percent)	30.00%
Department of Veterans Affairs [Member] \| Revenue concentration \| Customer concentration
Concentration Risk [Line Items]
Concentration risk percentage (percent)	58.00%	95.00%

Supporting Financial Informat28

Supporting Financial Information - Accounts Receivable (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Sep. 30, 2016
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable	$ 8,871	$ 6,637
Less: Allowance for doubtful accounts	0	0
Accounts Receivable, Net	8,871	6,637
Billed Receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable	7,459	5,265
Unbilled Receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total accounts receivable	$ 1,412	$ 1,372

Supporting Financial Informat29

Supporting Financial Information - Other Current Assets (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Document Fiscal Year Focus	2,017
Prepaid insurance and benefits	$ 332	$ 168
Total other prepaid expenses	425	374
Other current assets	$ 757	$ 542

Supporting Financial Informat30

Supporting Financial Information - Equipment and Improvements, net (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Property, Plant and Equipment [Line Items]
Document Fiscal Year Focus	2,017
Furniture and equipment	$ 670	$ 638
Computer equipment	330	202
Computer software	800	309
Leasehold improvements	38	38
Property, Plant and Equipment, Gross	1,838	1,187
Less accumulated depreciation and amortization	(718)	(543)
Equipment and improvements, net	$ 1,120	$ 644
Minimum \| Leasehold Improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Maximum \| Leasehold Improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	7 years

Supporting Financial Informat31

Supporting Financial Information - Goodwill and Intangible Asset Adjustment (Details) $ in Thousands	6 Months Ended
	Mar. 31, 2017USD ($)
Goodwill [Roll Forward]
Goodwill, Gross Period Start	$ 34,745
Goodwill, Measurement Period Adjustment	(8,756)
Goodwill, Gross Period End	25,989
Goodwill and Finite Lived Intangible Assets Total [Roll Forward]
Goodwill and Finite-Lived Intangible Assets, Gross Period Start	43,362
Goodwill Purchase Accounting Adjustment and Finite-Lived Intangible Asset Measurement Period Adjustment	250
Goodwill and Finite-Lived Intangible Assets, Gross Period End	43,612
Customer Relationships [Member]
Indefinite-lived Intangible Assets [Roll Forward]
Finite-Lived Intangible Assets, Gross, Period Start	7,247
Finite-Lived Intangible Assets, Measurement Period Adjustment	9,379
Finite-Lived Intangible Assets, Gross, Period End	16,626
Noncompete Agreements [Member]
Indefinite-lived Intangible Assets [Roll Forward]
Finite-Lived Intangible Assets, Gross, Period Start	1,370
Finite-Lived Intangible Assets, Measurement Period Adjustment	(890)
Finite-Lived Intangible Assets, Gross, Period End	480
Trade Names [Member]
Indefinite-lived Intangible Assets [Roll Forward]
Finite-Lived Intangible Assets, Gross, Period Start	0
Finite-Lived Intangible Assets, Measurement Period Adjustment	517
Finite-Lived Intangible Assets, Gross, Period End	$ 517

Supporting Financial Informat32

Supporting Financial Information - Goodwill (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2017	Sep. 30, 2016	Sep. 30, 2015
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Accumulated Amortization	$ (1,615)	$ (1,058)
Goodwill, Gross		0
Intangible Assets, Gross (Excluding Goodwill)		324
Amortization of Intangible Assets	(881)
Goodwill	25,989		$ 35,000
Finite-Lived Intangible Assets, Net	16,008
Goodwill and other intangible assets, net	41,997	42,304
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Accumulated Amortization	(1,523)	(993)
Finite-Lived Intangible Assets, Gross		300
Amortization of Intangible Assets	(830)
Finite-Lived Intangible Assets, Net	15,103
Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Accumulated Amortization	(44)	(65)
Finite-Lived Intangible Assets, Gross		45
Amortization of Intangible Assets	(24)
Finite-Lived Intangible Assets, Net	436
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Accumulated Amortization	(48)	0
Finite-Lived Intangible Assets, Gross		$ (21)
Amortization of Intangible Assets	(27)
Finite-Lived Intangible Assets, Net	$ 469

Supporting Financial Informat33

Supporting Financial Information - Intangible Assets Amortization Expense (Details) $ in Thousands	3 Months Ended	6 Months Ended
	Mar. 31, 2017USD ($)	Mar. 31, 2017USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Finite-Lived Intangible Asset, Useful Life		10 years
Year 1	$ 1,762	$ 1,762
Year 2	1,762	1,762
Year 3	1,762	1,762
Year 4	1,762	1,762
Year 5	1,762	1,762
Thereafter	7,198	7,198
Finite-Lived Intangible Assets, Net	16,008	16,008
Amortization of Intangible Assets	$ 400	$ 600

Supporting Financial Informat34

Supporting Financial Information - Accounts Payable, Accrued Expense and Other Current Liabilities (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Document Fiscal Year Focus	2,017
Accounts payable	$ 5,714	$ 4,324
Accrued benefits	1,194	1,197
Accrued bonus and incentive compensation	173	508
Accrued workers compensation insurance	1,035	981
Other accrued expenses	595	126
Total accrued expenses and other current liabilities	$ 8,711	$ 7,136

Supporting Financial Informat35

Supporting Financial Information - Long-term Debt (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Debt Instrument [Line Items]
Document Fiscal Year Focus	2,017
Long-term Debt	$ 21,563
Long-term Debt, Excluding Current Maturities	17,096
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months	3,750
Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Long-term Debt, Gross	21,563	$ 23,438
Unamortized Debt Issuance Expense	1,095	1,222
Long-term Debt	20,468	22,216
Long-term Debt, Current Maturities	(3,580)	(3,560)
Long-term Debt, Excluding Current Maturities	16,888	$ 18,656
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months	3,750
Long-term Debt, Maturities, Repayments of Principal in Year Two	3,750
Long-term Debt, Maturities, Repayments of Principal in Year Three	3,750
Long-term Debt, Maturities, Repayments of Principal in Year Four	3,750
Long-term Debt, Maturities, Repayments of Principal in Year Five	$ 6,563

Supporting Financial Informat36

Supporting Financial Information - Other Income (Expense) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Document Fiscal Year Focus			2,017
Interest income (expense), net	$ (215)	$ 0	$ (440)		$ 0
Amortization of deferred financing costs	(67)	0	(127)	$ 0	0
Increase (Decrease) in Derivative Assets and Liabilities	27	0	(52)
Other income (expense), net		(127)	0		$ (702)
Other income (expense) net	$ (255)	$ (127)	$ (619)	$ (702)

Credit Facilities (Details)

Credit Facilities (Details)	May 03, 2016USD ($)	Mar. 31, 2017USD ($)	Sep. 30, 2016USD ($)	Mar. 31, 2016USD ($)	Sep. 30, 2015USD ($)
Line of Credit Facility [Line Items]
Ratio of Debt to Earnings Before Interest, Taxes, Depreciations, and Amortization, Period Two	3.5
Ratio of Debt to Earnings Before Interest, Taxes, Depreciations, and Amortization, Period Three	2.5
Fixed Charge Coverage Ratio	1.35
Ratio of Debt to Earnings Before Interest, Taxes, Depreciations, and Amortization	2.99
Line of Credit Facility, Current Borrowing Capacity		$ 6,300,000
Cash and cash equivalents		3,091,000	$ 3,427,000	$ 6,934,000	$ 5,558,000
Term Loans
Line of Credit Facility [Line Items]
Maximum availability		25,000,000
Line of Credit
Line of Credit Facility [Line Items]
Maximum availability		10,000,000
Loan Balance		5,000,000
Debt Instrument, Unused Borrowing Capacity, Amount		5,400,000
Letter of Credit [Member]
Line of Credit Facility [Line Items]
Line of Credit Facility, Current Borrowing Capacity		$ 900,000
Term Loan with Fifth Third Bank [Member] \| Term Loans
Line of Credit Facility [Line Items]
Maximum availability	$ 25,000,000
Line of Credit Facility, Periodic Payment, Principal	$ 312,500

Credit Facilities - Schedule of

Credit Facilities - Schedule of Credit Facilities (Details)	May 03, 2016	Mar. 31, 2017USD ($)
Line of Credit Facility [Line Items]
Ratio of Debt to Earnings Before Interest, Taxes, Depreciations, and Amortization	2.99
Loan Balance		$ 21,563,000
London Interbank Offered Rate (LIBOR) [Member]
Line of Credit Facility [Line Items]
Interest rate (percent)		1.00%
Term Loans
Line of Credit Facility [Line Items]
Maximum availability		$ 25,000,000
Term Loans \| London Interbank Offered Rate (LIBOR) [Member]
Line of Credit Facility [Line Items]
Basis spread on loan		3.00%
Line of Credit
Line of Credit Facility [Line Items]
Loan Balance		$ 0
Maximum availability		$ 10,000,000
Line of Credit \| London Interbank Offered Rate (LIBOR) [Member]
Line of Credit Facility [Line Items]
Basis spread on loan		3.00%

Significant Accounting Polici39

Significant Accounting Policies - Goodwill, Income Taxes, and Cash and Cash Equivalents (Details) - USD ($)	6 Months Ended
	Mar. 31, 2017	Sep. 30, 2016	Sep. 30, 2015
Accounting Policies [Abstract]
Amortization of Intangible Assets	$ 881,000
Goodwill and other intangible assets, net	$ 25,989,000		$ 35,000,000
Cash, FDIC Insured Amount		$ 250,000

Stock-based Compensation, Equ40

Stock-based Compensation, Equity Grants, and Warrants - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands, shares in Millions	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Sep. 30, 2016
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Document Fiscal Year Focus			2,017
Total compensation expense	$ 64	$ 10	$ 549	$ 342
Unrecognized stock-based compensation expense	412	101	412	101
DLH Employees
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Unrecognized stock-based compensation expense	404	30	404	30
Non-employee Directors
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Unrecognized stock-based compensation expense	8	71	8	71
Selling, General and Administrative Expenses \| DLH Employees
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation expense	56	6	63	14
Selling, General and Administrative Expenses \| Non-employee Directors
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation expense	$ 8	$ 4	486	328
Restricted Stock [Member] \| Non-employee Directors
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total compensation expense			$ 456	$ 304
Long Term Incentive Plan 2006 \| Employee Stock Option
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Number of shares available for grant					0.5
Expiration term			10 years

Stock-based Compensation, Equ41

Stock-based Compensation, Equity Grants, and Warrants - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Number of Shares
Outstanding at the beginning of the period (in shares)	2,226
Granted (in shares)	400
Cancelled (in shares)	(10)
Outstanding at the end of the period (in shares)	2,616	2,226
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 1.43
Outstanding at the end of the period (in dollars per share)	$ 3.48	$ 1.43
Weighted Average Remaining Contractual Term
Weighted Average Remaining Contractual Term	6 years 7 months 6 days	5 years 9 months 18 days
Aggregate Intrinsic Value
Outstanding at the beginning of the period (in dollars)	$ 7,581
Outstanding at the end of the period (in dollars)	$ 9,121	$ 7,581

Stock-based Compensation, Equ42

Stock-based Compensation, Equity Grants, and Warrants - Stock Options Outstanding, Vested and Unvested (Details) - shares shares in Thousands	6 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Document Fiscal Year Focus	2,017
Vested and exercisable	1,949	1,909
Unvested	667	317
Option outstanding	2,616	2,226

Fair Value of Financial Instr43

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Debt Instrument [Line Items]
Derivative Liability, Current	$ 256	$ 204
Wynnefiled Capital, Bank Term Loan
Debt Instrument [Line Items]
Class of Warrant or Right, Outstanding	53,619

Fair Value of Financial Instr44

Fair Value of Financial Instruments - Fair Value Assumptions (Details) - $ / shares	6 Months Ended
	Mar. 31, 2017	Jun. 30, 2016
Fair Value Disclosures [Abstract]
Fair Value Assumptions, Risk Free Interest Rate	1.68%
Fair Value Assumptions, Expected Term	5 years
Fair Value Assumptions, Expected Dividend Rate	0.00%
Fair Value Assumptions, Expected Lives	4 years 1 month 6 days
Fair Value Assumptions, Weighted Average Volatility Rate	144.00%
Fair Value Assumptions, Exercise Price		$ 5.29

Fair Value of Financial Instr45

Fair Value of Financial Instruments (Schedule of Fair Value of Warrants) (Details) - Fair Value, Measurements, Recurring [Member] $ in Thousands	Mar. 31, 2017USD ($)
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability	$ 0
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability	0
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability	$ 256

Fair Value of Financial Instr46

Fair Value of Financial Instruments (Change in Level 3) (Details) - Warrant [Member] - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2017	Sep. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value	$ 256	$ 204
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Gain (Loss) Included in Earnings	52
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Purchases, (Sales), Issuances, (Settlements)	0
Fair Value, Liabilities Measured on Recurring Basis, Change in Unrealized Gain (Loss)	$ 52

Earnings Per Share (Details)

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Document Fiscal Year Focus			2,017
Numerator [Abstract]
Net income (loss)	$ 979	$ 337	$ 1,303	$ 221
Denominator [Abstract]
Denominator for basic net income (loss) per share - weighted-average outstanding shares (shares)	11,249	9,717	11,225	9,642
Effect of dilutive securities:
Stock options and restricted stock (shares)	1,496	949	1,488	898
Denominator for diluted net income (loss) per share - weighted-average outstanding shares (shares)	12,745	10,666	12,713	10,540
Net income (loss) per share - basic (dollars per share)	$ 0.09	$ 0.04	$ 0.12	$ 0.02
Net income (loss) per share - diluted (in dollars per share)	$ 0.08	$ 0.03	$ 0.10	$ 0.02

Commitment and Contingencies (D

Commitment and Contingencies (Details) $ in Thousands	Mar. 31, 2017USD ($)
Operating Leased Assets [Line Items]
Loan Balance	$ 21,563
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months	3,750
Long-term Debt, Maturing in Years Two and Three	7,500
Long-term Debt, Maturing in Years Four and Five	10,313
Contractual Obligation	26,168
Contractual Obligation, Less than 1 Year	4,776
Contractual Obligation, 1-3 Years	9,523
Contractual Obligation, 4-5 years	11,160
Contractual Obligation, after 5 years	709
Facility Leases [Member]
Operating Leased Assets [Line Items]
Operating Leases, Future Minimum Payments Due	4,122
Operating Leases, Less than 1 Year	900
Operating Leases, 1-3 Years	1,819
Operating Leases, 4-5 years	694
Operating Leases, after 5 years	709
Equipment Leases [Member]
Operating Leased Assets [Line Items]
Operating Leases, Future Minimum Payments Due	459
Operating Leases, Less than 1 Year	102
Operating Leases, 1-3 Years	204
Operating Leases, 4-5 years	153
Contractual Obligation	24
Contractual Obligation, Less than 1 Year	24
Contractual Obligation, 1-3 Years	$ 0

Commitment and Contingencies -

Commitment and Contingencies - Additional Information (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Accrued workers compensation insurance	$ 1,035	$ 981

Business Combinations (Details)

Business Combinations (Details) - USD ($) $ / shares in Units, $ in Thousands	May 03, 2016	Mar. 31, 2017	Mar. 31, 2017
Business Acquisition [Line Items]
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual			$ 20,500
Business Acquisition, Pro Forma Income (Loss) from Continuing Operations, Net of Tax			$ 1,200
Dayna International, LLC
Business Acquisition [Line Items]
Business Combination, Consideration Transferred, Net of Debt Issuance Cost	$ 38,750
Business Combination, Consideration Transfered, Working Capital Adjustment		$ 470
Consideration transferred	$ 36,720
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Shares Issued	670,242
Equity consideration transfered	$ 2,500
Business Acquisition, Share Price	$ 3.73
Minority interest ownership percentage	6.00%
Business Combinations, Contingent Consideration, Payments		250
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Increase in Indefinite-Lived Intangible Assets		9,000
Goodwill, Period Increase (Decrease)		9,500
Business Combination, Contingent Consideration, Decrease to Amortization		$ 300
Cash	$ 3,750
Subordinated Debt \| Dayna International, LLC
Business Acquisition [Line Items]
Debt Instrument, Face Amount	2,500
Line of Credit \| Dayna International, LLC
Business Acquisition [Line Items]
Debt Instrument, Face Amount	$ 30,000

Business Combinations - Purchas

Business Combinations - Purchase Price and Allocation of Assets and Liabilities (Details) - USD ($) $ in Thousands	May 03, 2016	Mar. 31, 2017	Sep. 30, 2015
Business Acquisition [Line Items]
Goodwill and other intangible assets, net		$ 25,989	$ 35,000
Dayna International, LLC
Business Acquisition [Line Items]
Cash	$ 36,720
Common stock, fair value	2,500
Business Combination, Consideration Transfered, Net of Cash Acquired	39,220
Cash and cash equivalents	4,009
Accounts receivable	5,712
Other current assets	444
Total current assets	10,165
Accounts payable and accrued expenses	(5,013)
Payroll liabilities	(1,432)
Net working capital surplus	3,720
Property and equipment, net	403
Other long term assets	81
Net identifiable assets acquired	18,107
Goodwill and other intangible assets, net	17,393
Net assets acquired	39,220
Customer Relationships [Member] \| Dayna International, LLC
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	16,626
Noncompete Agreements [Member] \| Dayna International, LLC
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	480
Trade Names [Member] \| Dayna International, LLC
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	$ 517

Business Combinations - Pro For

Business Combinations - Pro Forma Results (Details) - Dayna International, LLC - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Mar. 31, 2016
Business Acquisition [Line Items]
Revenue	$ 29,905	$ 28,987	$ 56,016	$ 57,495
Net income	$ 979	$ 821	$ 1,303	$ 426
Number of shares outstanding - basic (in shares)	$ 11,249,000	$ 11,098,000	$ 11,225,000	$ 11,023,000
Number of shares outstanding - diluted (in shares)	12,745,000	12,047,000	12,713,000	11,921,000
Basic earnings per share (in dollars per share)	0.09	0.07	0.12	0.04
Diluted earnings per share (in dollars per share)	$ 0.08	$ 0.07	$ 0.10	$ 0.04

Related Party Disclosure (Detai

Related Party Disclosure (Details)	6 Months Ended
Related Party Disclosure (Details)	Mar. 31, 2017shares
Wynnefiled Capital, Bank Term Loan
Related Party Transaction [Line Items]
Class of Warrant or Right, Outstanding	53,619